Oklahoma Education Funding Cut from Smaller Pie

Oklahoma's Department of Education has the same problem as other state agencies, according to an analyst: The state budget is smaller than it used to be.

"What we're seeing is the overall pie is shrinking," said Gene Perry, a policy analyst at the Oklahoma Policy Institute. "So every agency is facing the cost of that, including education."

The Department of Education received $253.5 million less in state appropriations in fiscal year 2012 than in its most recent funding peak of fiscal year 2009, Oklahoma Office of State Finance data show. The 10 percent drop in department appropriations occurred while inflation rose nearly 3 percent in southern urban areas, according to the Bureau of Labor Statistics.

Although total dollars have declined, the percentage of funds that the education department receives from the state budget has remained relatively constant over the past decade - ranging from 35 to 38 percent of total appropriations, data show.

Oklahoma general revenue collections peaked in fiscal year 2008, Perry said. The recession the following year caused revenue from personal income tax and sales tax - the state's two greatest funding sources - to decrease.

Revenues have still not returned to their prerecession peak. Revenues in fiscal year 2011 remained 16.5 percent below fiscal 2008, he said.

The full phasing in of personal income-tax cuts in January combined with Oklahoma's incomplete recovery from the recession means the state is facing the possibility it will not be able to recover to the fiscal year 2008 revenue level, Perry said. The personal income-tax rate dropped from 5.5 percent to 5.25 percent on Jan. 1. That equaled approximately $125 million in losses for the state, he said.